Beyond the expression of autoimmune diabetes, NOD mice appear to harbor inherent defects in peripheral tolerance that renders these animals refractory to the induction of allograft tolerance. Combined, these issues make successful islet allotransplantation extraordinarily difficult in this model. Importantly, much of the autoimmune propensity in NOD mice maps to the bone marrow compartment. Depending on the donor, bone marrow transplantation can transfer either disease susceptibility or protection. In most previous studies involving tissue/organ transplantation, bone marrow has been used as a tolerogen for a specific donor and has been successfully applied in the NOD mouse. However, while conceptually very important, the toxic induction therapies involved and subsequent risk of graft-versus-host disease associated with MHC-mismatched bone marrow engraftment may preclude this approach for clinical application in the near future. In this proposal, rather than using bone marrow as a donor islet transplant-specific tolerogen, MHC-matched (H-2g7), disease-resistant bone marrow allografts will be used as a means of 're-programming' the NOD peripheral immune system to make the host amenable for tolerance induction. Thus, this proposal will test the general working hypothesis: MHC-matched, disease-resistant hematopoietic cells will dominantly regulate disease-prone cells and restore normal peripheral tolerance propensity. This hypothesis will be tested by the following specific aims: (1) Determine the extent of disease protection afforded by introducing MHC-matched, disease-resistant bone marrow in NOD mice, (2) Determine whether mixed chimerism with disease-resistant marrow will correct the inherent allograft tolerance defect in NOD mice, and (2) Determine the components within protective marrow that confer restoration of peripheral tolerance propensity in NOD mice.